How to Hire for Your Small Business
Hiring for your business is an exciting time for your business. Whether you’re bringing on your first employee or building out a team, it’s a sign your small business is growing. It’s important to ensure you’re finding the right talent, being able to bring them in and retain them, how to interview them and more.
Fortunately, we made this guide to help you. No matter where you are in your hiring process, you can use this guide to help you make the best decision for your business. We’ve broken it down into six chapters:
- Hear from the experts
- Finding great, loyal talent
- Make people want to work for you
- Interview tips
- Retaining top talent
- Choosing a payroll software
Hear from the experts
Carrie Luxem is a human resources professional specializing in the restaurant industry. In 2010, she founded Restaurant HR Group where she partners with dozens of restaurateurs to take care of their greatest assets — their people. With a career that has spanned nearly 20 years, Carrie is frequently sought out for her modern, yet simple and effective advice and has been featured in Entrepreneur, Restaurant News, and Independent Restauranteur. Connect with her on social media or learn more at CarrieLuxem.com.
Carrie Luxem, CEO and founder of Restaurant HR Group, begins her expert video series with Kabbage by discussing two important aspects of running a restaurant: management & leadership and recruiting great talent.
In her first video, Carrie breaks down the difference between a manager and a leader. While the two are linked, they focus on different things, and Carrie believes that everyone and anyone can be a leader. To learn more about how you can be a leader at your restaurant, check out her video below!
In her second video, Carrie discusses how to recruit the best talent for your restaurant. From job boards to referral programs to social media and more, you’ll learn multiple effective strategies for hiring new and loyal talent. Check out the video below to learn more!
Finding great, loyal talent
Your business is only as strong as its talent. Though it may be tempting to do everything yourself, you’ll eventually need great and loyal talent to take your visions and turn them into realities. Finding the right employees can be tough, but the process is worthwhile to build a strong and sustainable business. Here are five tips on how to find hard-working and loyal employees for your small business or start-up.
1. Network, network, network!
Networking is one of the best ways to meet new talent. Take time to speak at events, attend meetups and mingle at networking events. These are all great opportunities to communicate your vision and mission to others while meeting other talented and motivated individuals. Before attending events, make sure that you have a short pitch for your business that you can use to sell others on your idea and get them interested in being a part of your small business or start-up.
2. Hire those who have become your fans.
The best employees are those who believe wholeheartedly in your company’s mission and vision. That’s why many entrepreneurs hire their fans – people who are already knowledgeable and passionate about the company. These types of employees are often willing to go above and beyond to achieve the brand’s goals and grow the company. Not to mention, they’re great for word-of-mouth marketing and can even help you attract more talent later.
If your fans don’t have the skills necessary to work for your start-up, consider training or finding new roles for them as passion and a positive attitude can often go a long way in helping your business succeed.
3. Make use of apps to find great talent.
There are many apps out there that can help you find great talent for your start-up or small business. Meetup is an excellent place to find passionate locals who are interested and experienced in the type of work that your start-up does.
There are many other apps and forums that can help you connect with specific types of professionals that specialize in the type of work that you need for your start-up. Do a little research online to find some resources for groups of passionate and talented people in your industry. Then, work to become active in these groups to share your mission and vision with others who may be interested in helping you grow your business.
4. Talk about your brand online.
Entrepreneurs can also utilize other online channels like blogs to find new talent. Blogging is not only an effective way to market your brand, but it can also help you develop thought leadership and establish your company as an expert in the industry. In your blog, you can write about your customers’ biggest challenges as well as the challenges you have faced in the industry and the lessons you’ve learned over time.
In addition to building your own brand blog, look for opportunities to guest blog on relevant sites. This helps you increase your reach and engage more individuals. Creating blog and other online content can help you attract new talent and get them interested in working with your brand.
5. Don’t write off remote employees.
Many entrepreneurs may be wary about hiring remote employees. However, this is often one of the best ways to find great and loyal talent. When hiring remote employees, you have the pick of some of the most talented, intelligent and innovative people on the planet. Though it may not be viable to hire remote employees for every position, entrepreneurs should consider remote working arrangements for positions that are well-suited for this type of work environment.
If you’re concerned about work ethic or time management, look for employees who have worked in remote or flexible work arrangements previously. Remote employees also help reduce bills as you can use a smaller office space and provides them the benefits of saving money they’d spend on gas or public transportation.
Once you’ve found great talent for your start-up or small business, you will need to find ways to ensure that your team is happy and satisfied in their positions. One great way to keep great employees happy is by providing benefits or other perks. This could range from catered lunch to massage chairs to an espresso machine.
Many small businesses may not be able to offer the highest salaries or best medical benefits, but there are other ways that they can make up for this and retain great employees. One way to do this is by providing a flexible work environment. Whether this means allowing your employees to work from home a few days a week or providing them with unlimited vacation opportunities and sick days, flexibility in the workplace is a benefit that many larger companies are not able to offer their employees.
If you want to see your small business grow and succeed, you’ll need to shoulder some of the burden. The best way to do this is by finding strong and loyal talent. The process can be difficult, and sometimes long, but having a team that believes in your company’s values and wants to see it succeed as you do is worthwhile in the long-run.
Make people want to work for you
With the economy gaining strength, top-tier employees often have their pick of positions, so how can small businesses compete with larger companies when it comes to attracting and retaining the best workers?
The answer lies in effectively communicating ways you are a desirable employer, such as highlighting your culture of inclusion, your strong mission statement or your genuine employee focus. Highly-regarded employers of choice favor the well-being of their employees and clients, which in turn, draws talented people.
It’s a good idea, no matter what the size of your business, to offer as many standard benefits as you can afford – for example, some type of health plan, 401K and paid time off.
To sweeten the compensation package, though, develop creative options that make you more attractive than your larger competitors. We strongly recommend considering the following five ideas that could challenge, empower and reward your employees through benefits and perks that extend beyond a hefty paycheck:
1. Keep it flexible.
A popular benefit you can offer potential employees is the opportunity to balance work and personal time more effectively. While traditional offices expect five-day work weeks (clock in at 8 a.m., clock out at 5 p.m.), you can evaluate different ways to accommodate your employees’ needs while getting the work done:
- Offer four-day work weeks.
- Give employees flex-time, meaning they choose the schedule that fits their home life best.
- Offer job sharing opportunities.
- Provide telecommuting options, even if it’s for one or two days per week
2. Offer growth opportunities.
Employees value training opportunities that allow for personal and professional development. A survey of college seniors found that when weighing job offers, they first considered opportunities for personal growth before job security and pay.
Developing your employees will not only enhance their skills and increase satisfaction, but it will also maximize the quality and productivity of your overall workforce. Have a robust employee development program in place and make sure everyone knows about it. Here are some ideas:
- Offer to pay for training classes or professional certifications related to their field.
- Reimburse tuition, in full or in part, for academic degrees, even if they are not directly related to the employee’s position.
- Create a mentoring program.
- Task employees with assignments and responsibilities that draw on their new skills or areas of study.
3. Recognize value.
Showing employees both privately and publicly that you value them and their contributions to your company is a powerful way to express appreciation to your workforce, gain loyalty and boost morale. Recognition programs and awards can be a low-cost, high-impact element of the total compensation package.
- Make it standard practice to look for and call attention to your employees’ outstanding or innovative ideas and behavior.
- Create a simple system in which employees are nominated for their extra effort or customer service by your customers or their coworkers.
- If an employee’s idea or suggestion is used and it benefits your company, pay a special bonus or “thank you” reward. Have a standard amount noted in the policy so it’s fair and equitable for everyone.
- Other tangible rewards can be anything from a day off with pay, a gift card or bonus or a special personal treat such as a car detail.
- Offer tickets to sports, music or cultural events.
- Provide a donation in an employee’s name to the charity of his or her choice.
4. Share the wealth.
While money isn’t everything, offering bonuses or profit sharing programs can motivate your employees to help build your company and to feel a part of its growth. Profit sharing can be based on the profitability of the overall business or by specific profit centers.
5. Offer other great perks.
Explore ways you can provide those extra-special benefits that aren’t available at every employer. Not all of these options will work for everyone, but keep an open mind and consider offering the following:
- Make your office pet-friendly; if every day is not possible, try one day per week.
- Offer a complimentary breakfast bar or other low-cost food perks.
- Promote a discounted group rate for a nearby child care facility, or better yet, offer childcare on-site if possible.
- Provide complimentary transit passes and subsidize parking to help offset your employees’ costs.
- Provide a game room or lounge for employees to take breaks and decompress.
Offering perks to help employees balance their work and personal lives will make job seekers more likely to apply for your business. Try to incorporate some awesome perks in your small business to attract more talent.
The biggest corporations have experienced human resources professionals to handle all interviewing, hiring, and firing. They know not only the best questions to ask and the best assessments to use, but also the laws that govern what’s appropriate to ask during an interview.
To help you with your interviewing process, here are ten top tips from human resources experts.
1. Interview twice.
Two interviews conducted at different times by two different people is a far more reliable method for choosing a perfect candidate than a group or single interview. It takes a little extra time – and may require some creativity if you run a very small shop – but it helps weed out personal preferences that have little to do with the specific requirements of a job. It also helps as a defense against accusations of discrimination (which are a risk for companies of any size).
2. Practice the 80/20 rule.
You know the 80/20 rule as applied to productivity and customers, but it’s just as much a part of interviewing. From start to finish, you should do at most 20 percent of the talking. Many interviewers spend time talking about the company or even themselves, but the point of the interview is to find out as much as you can about the candidate.
3. Get familiar with Google Forms.
Major corporations often conduct a custom-built assessment test as an early stage in the interview process. If you can’t afford something like that (they run in the five and six figures even for basic builds), but Google Forms allows you to create one for the cost of about a week’s worth of effort. This tool will weed out the most unqualified candidates (and the job seekers who won’t bother beyond a resume), letting you focus your efforts on the best leads.
4. Meet with the team.
In the smallest businesses, you are the team and you know exactly what you need to make a good decision about what a particular position requires. But if you’re not in a department on a daily basis, take time to visit with that team. Ask them what they would like to see in a new candidate and specific questions that will best gauge the core qualifications for the job. The people who best know what a job requires are the people who do that job – or work with the person who does that job – daily.
5. Follow-up with the candidate.
Don’t be satisfied with the first answer to any given question. Instead, ask a follow-up question on whatever part of the candidate’s answer that caught your attention the most. Do this for two reasons. First, it helps you stay focused on the interview, which can become difficult as a day of interviews wears on. Second, you’ll learn more about the candidate as a person when you go beyond the first level of queries.
6. Take enough time.
Schedule an hour per interview, minimum. Although most won’t take that long, it leaves time at the end to take notes and even rest before the next candidate comes through. If you’re tired or pressed for time, you will not conduct effective interviews. If you don’t take notes, you won’t remember the most important differences between the various candidates.
7. Research the candidate.
Thirty minutes on Google and Facebook will tell you a lot about a person. Don’t use that information to find the most embarrassing bachelorette party or frat house photos to grill and embarrass them. Those have little to do with the job (and you wouldn’t want to be judged for your most embarrassing moments either).
Instead, look for the hobbies, interests and experiences that would make the candidate a great match for the position and the culture of your company as a whole. Open the interview with a few questions on those topics. It will put the candidate more at ease and allow for a more comfortable and honest conversation.
8. Practice active listening.
Active listening is a counseling and mediation technique that both helps you listen and understand someone more fully and reassures the person that you’re fully listening. Like any skill, it takes practice, but you can learn the basics in a couple of hours and practice them with your staff. Even a little bit of active listening can produce very different results in an interview.
9. Avoid the forbidden list.
It’s against the law to make hiring decisions based on:
- Family status
- Criminal record if it’s irrelevant to the position
- Country of origin
- Sexual orientation
If you ask about any of these points and don’t hire a candidate even if the question had nothing to do with the decision, you open yourself up to a lawsuit. Avoid those topics in their entirety.
10. Stay flexible.
Most interviewers go into the meeting with a list of questions, which they then ask in order. Although it’s good to show up prepared, the list should not direct the meeting. If an answer needs some follow-ups (see tip 5 above) to get the information you need, you should ask those follow-up questions.
If the candidate answers your sixth planned question during his addressing of your third one, go ahead and skip question six. An interview is a conversation, not a manufacturing process. Arrive prepared to customize it as the candidate and situation require.
You’ve probably already practiced a few of these tricks but adding just one or two to your repertoire can help make your next interview more likely to bring in the best talent for whichever position you need filled.
Retaining top talent
This section was provided by USC Marshall School of Business. Consistently ranked among the nation’s premier institutions, the USC Marshall School of Business is internationally recognized for its emphasis on entrepreneurship and innovation, social responsibility, and groundbreaking research. Located in the heart of Los Angeles, one of the world’s leading business centers and the U.S. gateway to the Pacific Rim, Marshall offers its 5,700-plus undergraduate and graduate students a unique world view and impressive global experiential opportunities. With more than 80,000 members in their alumni community spanning 123 countries, USC Marshall students join a worldwide network of thought leaders who are redefining the way business works.
Big business deals and big businesses are more often than not the focus of attention-grabbing headlines. What they’re doing, who they’re merging with, even how many people they’re hiring and firing – those are news stories that receive lots of attention.
But what should, and doesn’t, receive as much attention are small businesses. There are millions of small businesses in the United States, accounting for a much bigger portion of the day-to-day economy than many people realize. For example, according to recent research, there are more than 28 million small businesses in the U.S, with 21 percent hiring employees.
A snapshot of employees and challenges
It’s not just real estate that occupies the minds of small business leaders – it’s employees, too. That’s because small businesses provide more than half all of jobs, and more than two-thirds of all jobs created in over four decades can be attributed to small businesses. While the layoffs at big businesses grab a lot of headlines, the flip side of that coin is more interesting: As big business trimmed some 4 million jobs, small business added 8-million of them, all since 1990.
But there’s a troublesome twist to that otherwise positive statistic: about 2 million Americans voluntarily quit (as in they weren’t fired or laid off) every month, according to the U.S. Department of Labor Bureau of Labor Statistics. And if they’re not quitting, they’re thinking about it: According to one study, about one-third of people are actively looking for a job, and three-fourths would think about it. So why the disconnect? Why do people get a job – and then want to leave it?
The causes of our discontent
Of course, general unhappiness is one reason people leave their jobs. But that unhappiness can come from many sources. Some may have conflicts with a boss that seem to hamper their growth or their possibility for advancement.
Other people may believe that they have no power in their jobs, which makes them frustrated, or they may feel overworked and under-compensated. Some employees may have serious conflicts not with a boss, but with co-workers, or they may feel they are not getting credit when they should be.
Other people may believe they can find a better opportunity with more desirable benefits, pay and advancement opportunities if they leave.
Still, others have built up enough skills or developed a strong enough idea that they’re ready and willing to create their own business. In fact, about one-fourth of all executives want to start their own companies, according to Business Insider. In turn, they’ll confront the same challenges, including how to grow well and how to attract and keep good people.
What employees want and how you can help them
Of course, one of the biggest reasons people love – or loathe – a job is the employment package. But many people suffer a lack of imagination when it comes to discussing it. They think the reasons for disgruntlement are just about the annual pay.
Certainly, pay is an understandable concern for employees. They want to be compensated fairly for their time and efforts, rewarded for helping the company achieve goals and recognized for growing themselves as employees. But as it turns out, employees are worried about – or hopeful for – much more than just a paycheck.
Perks come in two different forms: esoteric and tangible. The esoteric perks are harder to quantify but no less important. Ask yourself:
- Do your employees feel as though they are respected by you and members of the team?
- Do they feel as though they are listened to and that their ideas may have a chance for advancement?
- Do they feel good about coming in to work every day – or not so great?
- Do they trust you to do right by them and by the company as a whole?
If you feel confident about the answers to these questions, you may have created a culture that’s employee-focused, which means you’ve made a big step toward ensuring that all those employees that walk out each day walk back in the next.
The tangible perks are easier to understand, but they still offer some muscle room for companies to adapt and use effectively and creatively. Prioritize time off: Employees want more of it – and there are plenty of interesting ways to give them more control over their day-to-day schedules. Ask yourself:
- Is a flexible workday impossible for you to consider – or have you just not considered the possibility?
- Are you able to encourage well-being (an intangible) by actively encouraging fitness, either through fitness stipends or classes at work?
- Can you provide even small things – magazines everyone wants to read, good coffee, classes or outings several times a year?
These perks can help your business retain its employee assets in a productive, meaningful way.
It can be hard to balance everything that it takes to keep your business intact and afloat. But if you start at the beginning – or start today – you won’t be as likely to lose a key person at the wrong moment or find a whole department up in arms over a particular issue. And there are plenty of ways you can invent your own employee-focused culture, even at the smallest of businesses.
Choosing a payroll software
You have employees that you need to pay, but you don’t like to run payroll. So, you decide that you want to find a fast and inexpensive way to do it. You determine that payroll software is the best fit for you. There are many payroll programs from which you can choose, and many require minimal time and have a low cost. But, how do you choose the right payroll software for your business?
There are two main things that you need to consider when choosing payroll software for small business: your needs and the cost.
Consider your payroll needs
The software features you need will depend on your skills and available time.
First, think about your payroll knowledge. If you do not know much about payroll or payroll tax liabilities, you might want to look for a software program that will walk you through each step of the process.
You might want to consider using a payroll software for small businesses that handles payroll taxes for you. While this option costs slightly more, you will not need to worry about what forms to use or when to send payments. By letting the software provider handle taxes, you will save time and reduce frustration.
Next, think about your needs. What features are you unable to live without? For example, if your employees receive commissions, your payroll software must have a way to account for the commissions. Or, if you need a way to track the hours employees worked, the software needs to have time and attendance features.
Features you might need include:
- Time and attendance tracking
- Human resources form storage
- Overtime calculations
- Tip income management
- Employee self-service access
- Benefit deductions
The software should also be compatible with the way you pay your employees. Whether you pay your employees using checks, direct deposit or some other method, the software should work with the payment method that you already have in place.
Consider the costs of payroll solutions
You already spend a lot of money to run your business. You have to purchase inventory, pay rent and utilities and compensate employees. While some expenses help your business generate a profit, payroll processing costs only cause your business to spend money.
You should carefully consider costs when choosing small business payroll software. You do not want to overspend on a task that automatically causes your profit to shrink.
Many things influence software costs. When you are shopping for payroll services, determine what things you need to efficiently and accurately run payroll. Figuring out what you need will prevent you from overspending on non-essential items.
Here are six things that will impact the cost:
Some programs have tons of cool features, but do you need those features? Many of the features will go unused. Software loaded with features will cost more, too. Stick to your most basic needs. You will save money by selecting software with fewer features.
2. Extra add-ons
Some payroll programs don’t come with every feature included; you might need to purchase add-on programs to get access to the features you need. Buying add-ons allows you to pay only for what you really need. But, you need to remember the cost of the add-ons when adding up the total expense of buying payroll software.
3. Pricing structure
There are two main ways that payroll service providers charge for their software. Some providers will charge you based on the number of employees you paid. This is beneficial if you want to pay your employees frequently. Other providers will charge you based on the number of payrolls you run. With this option, the cost to run frequent payrolls could add up.
How often do you think you will need to call customer support? While this is difficult to know with certainty, you might want to consider your knowledge of payroll and technology.
Sometimes, contacting customer support is free. But some payroll software providers will charge you each time you need help. If you think you’ll frequently contact customer support, look for software that comes with free customer support. Even if you think that you won’t need to contact the company, free customer support services are beneficial just in case.
Before you purchase payroll software, find out if the software provider requires you to sign a contract. If you do, ask about any related fees, such as a fee for breaking the contract early or any signing fees.
Some payroll providers offer to enter your payroll history in the software for an additional cost. Make sure to double-check whether you’ll be charged before you give them the go-ahead.
You get what you pay for: Don’t be too frugal
You don’t want to pay too much, but you also don’t want to be stingy when paying for payroll programs for small business that could potentially free up hours of your time. You need to pay for software that provides features tailored to your individual needs.
If you choose a less expensive software simply to save a few dollars, you might lose the features, support or functionality that caused you to consider payroll software in the first place. Evaluate your options by examining payroll software based on the features that you need the most.
Most importantly, select the payroll provider that offers what you’re looking for – even if they aren’t the cheapest option. Hiring is vital for your small business, so you want to be sure you have the right tools and strategies in place to find great talent and reduce your turnover rate.